1350 words (12 minutes reading time) by Lancing Farrell

Summary

Ken Miller’s book, “We Don’t Make Widgets: Overcoming the Myths That Keep Government from Radically Improving,” presents the author’s experiences of working in government and his insights on the three myths that hinder the improvement of government services. The first myth is that government services are intangible and cannot be measured or managed, unlike widgets in the manufacturing industry. The second myth is that the people receiving government services cannot be considered customers, as they are hostages who cannot make choices about the provider and have competing interests. The third myth is that governments are not here to make a profit, which Miller defines as the private sector’s way of measuring return on investment.

Thank you to Adam Thompson from Zen Organisations for heading me in the direction of Ken Miller and his book ‘We Don’t Make Widgets’, subtitled, Overcoming the Myths That Keep Government from Radically Improving. It is an interesting read from the viewpoint of someone who has worked in government and spent their life trying to improve it.

Ken Miller was an original myth buster.

Miller says there are three myths that stop government services from improving. The first is that, in government, we don’t make widgets. This is the opinion commonly put forward by people in support of the idea that services are intangible and hard to describe, unlike widgets. Therefore they can’t be measured, managed or improved using any of the methods developed and used in other fields of human endeavour, particularly manufacturing.

The second is that, in government, we don’t have customers. This is another opinion commonly put forward by people who choose to see a customer as someone buying something in a transactional situation. They see the people receiving government services as hostages who cannot make choices about the provider and who have competing interests, which means they cannot agree on what they want. Therefore, we speak about customers in the abstract, or simplify matters by saying taxpayers must be the customer, and even blame competing interests for lack of clarity about the actual customer.

The third myth is that, in government, we are not here to make a profit. This is a more complicated myth to bust. Miller begins by redefining profit as the private sector way of measuring outcomes, in particular, return on investment. He says a profit-making enterprise has to improve or die because it is driven by the natural force of competition and the necessity to provide a return to investors.

In detailed chapters, Miller sets out to explain and bust each myth. I plan only to discuss key points made by Miller. Anyone interested in knowing more should read the book. It is the only book I have owned for a month and already it has been read by three other people!

Myth 1: We Don’t Make Widgets

The real insight in Miller’s use of widgets is in the role they play as part of the system of work in government. He is a systems thinker who has a unique way of describing a system. I have reproduced his diagram of a system of work below.

A widget is the deliverable at the end of a process in the system of work. The customer is anyone who uses the widget. Some of the widgets produced by local government are parks, permits, roads, community grants, food premises inspections, local laws and answers. I found ‘answers’ to be interesting. Miller says the budget is simply a prepared answer to the question ‘how much money do you think you will spend?’. Likewise a planning permit is a prepared answer to the question ‘are these works compliant with the Planning Scheme?’.

Myth 2: We Don’t Have Customers

Miller says the customer is whoever uses a widget. They don’t have to be the person who paid for the widget. Miller says government has many alternative terms to avoid using the word customer. There have been posts on this before. Some more interesting ones used by Miller are applicant, candidate, claimant, offender and violator.

Of course, taxpayers can also be customers if they use the widget. He uses the example of the Ford motor car company and the Mustang. Someone who buys a Mustang is not necessarily a shareholder or investor in Ford. A taxpayer, or ratepayer in local government, is obviously an investor in a municipality. They own the land that is a defining element of what constitutes a municipality. Fundamentally, as Judge Glock says, a municipal area is just an area of land owned by lots of people who are seeking to maximise the return on their investment in that land. Part of that return comes from the value of widgets created by the council that meet the needs and expectations of people living, working or visiting in the municipal area.

Myth 3: We are Not Here to Make a Profit

I found this to be Millers most interesting insight into the myths that dominate in government. It relates to the idea that ratepayers are investors. They want a return on that investment and it is incumbent on the council to continuously strive to maximise that return. Miller says that return is not measured in dollars, instead it is things like new jobs created, an increase in affordable housing, and reduced crime. These are life problems for people that get solved through the production of widgets – widgets like land zoning, planning permits, and street lights.

He says that government needs to communicate the value created in terms that matter to the taxpayer/investor. Unlike us, they don’t care how many employees we have doing the work, how many widgets those staff produced, or how many people used the widgets. Investors don’t care. They just want to know what their return on investment was. It is easy to say that the value produced should be measured and communicated. Miller says doing that can be difficult because the value is in outcomes.

He advocates using the ‘5-whys’ questioning to get to the outcomes of a work system. For example:

• We produce a job training program for job seekers. (This is the widget and the customer).
• Why? So they can increase their skills.
• Why? So they can get a job.
• Why? So they can keep a job.
• Why? So they can obtain a higher wage.
• Why? So they can support their family. (this is the outcome – or, in John Seddon’s terms, it is their life problem to solve and the purpose in them placing a demand for job training)

Now you can start to track how many skills attendees acquire, how many get jobs, how many keep them for 12 months, and what the attendees wages were before they entered the program and afterwards. Has the life problem of attendees been solved? Are families who live in the municipal area now more likely to have a good life? Will that make it a more attractive place for people to live? Will land values increase? And it goes on.

Miller provides the benefit of his views and experience in ways governments try to improve. Chapter 6 is titled ‘Making it Happen: Leading a Large-Scale Change Initiative. It has some helpful advice. Chapter 2 is much more interesting. It is titled ‘The Amazingly Ineffective (Crazy Actually) Ways Government Tries to Improve’.

In Chapter 2, Miller dissects change methods that he says have been proven not to work, such as bringing in panels of external experts to take a high level look at the organisation and tell you how to make it more effective and efficient; a team of central planners to ‘link every dollar, every move, every bathroom break, and every copy machine to the objectives of the unit, which are perfectly in sync with the goals of the division, which are tightly aligned with…(we have all met these organisational idealists)’; reorganisations that don’t improve systems and only serve to change where dysfunctional systems reside; and changing performance appraisals to hold people accountable (because the problem is people not giving their all and needing to be motivated by management to perform!).

All in all it is an interesting book. My main take away is that while leaders perpetuate the myths of government, they won’t change the way they think, which means they won’t behave differently, which in turn means the system will remain as it is …

We Don’t Make Widgets: Overcoming the Myths That Keep Government From Radically Improving by Ken Miller, 2006

Judge Glock on Zoning and Local Government, Econtalk podcast 2022